2008 BCSC 574 Drake v. Fox

Before: The Honourable Mr. Justice Vickers

Reasons for Judgment

Counsel for the Plaintiff	S. L. Dick
Counsel for the Defendant	K. M. J. Rongve
Date and Place of Hearing:	30 April 2008
	Nanaimo, B.C.

[1] This is a motion pursuant to Rule 18A raising the following issues:

1. Is the plaintiff entitled to spousal support from the defendant?

2. What is the value of property previously owned by the plaintiff on Russell Road in Nottingham, United Kingdom and what interest, if any, does the defendant have in the sale proceeds of that property?

3. What are the interests of the parties in 2 pieces of property, namely: 384 Allwood Road, and #5 - 182 Moilliet Road, both located in Parksville, B.C.?

4. Is the plaintiff entitled to an order for the return of certain chattels listed in the notice of motion dated January 4, 2008?

[2] While the affidavit evidence is conflicting, I believe I am able to make sufficient findings of fact to dispose to the central issues confronting the parties.

[3] The plaintiff, who is employed as a crisis home manager, was born on March 27, 1947 and is 61 years of age. She earns approximately $30,000 annually. The defendant was born on September 21, 1963 and is 44 years of age. She is a nurse and earns approximately $64,000 annually.

[4] The parties met in England in the late summer of 1990. The plaintiff was a citizen of the UK, the defendant a Canadian. They began to live together that year and continued in a committed, marriage‑like relationship, for almost 15 years. In the initial years, they lived in the plaintiff’s rental accommodation in Nottingham and they travelled together in Europe. From 1992 to 1994, they lived for a period of 18 months in British Columbia and Alberta. At the outset of this relationship, neither party owned any real property or other significant assets.

[5] The parties returned to the UK in 1994. The defendant returned to Canada later that year to begin her nursing studies. That same year, the plaintiff learned that because of her long term tenancy with the Housing Association in Nottingham, she was eligible to receive £8,000 as a deposit on the purchase of a home. She took advantage of this and purchased the property at 7 Russell Road, Nottingham, UK. The purchase price of this home was approximately £31,308. The plaintiff arranged a mortgage of approximately £23, 250. When this property was purchased, both parties contemplated that the defendant would return to the UK on completion of her education and they would live together in a committed marriage‑like relationship in this new home.

[6] The defendant never lived in this property because shortly after its purchase, the plaintiff found employment in Victoria, B.C. where the defendant was pursuing her nursing studies. The plaintiff relocated permanently to Canada in December 1994. The defendant sponsored her as a landed immigrant and the plaintiff acquired this status in August of 1995. The property on Russell Road in Nottingham was leased to a tenant and the rental payments covered the mortgage and most of the ongoing maintenance costs. Excess funds were used from time to time to assist in travel and other personal expenses of both the plaintiff and the defendant.

[7] The plaintiff sold the Russell Road property in July 2007, after the parties’ separation, for £74,000. The net proceeds were £50,100.

[8] The parties lived together in rental accommodation until February 2002 when the home at 384 Allwood Road in Parksville was purchased by them as joint tenants. Throughout their time at Allwood Road, they shared living expenses and the chores of daily living. They lived at Allwood Road until April 2005 when the plaintiff moved to #5 - 182 Moilliet Road in Parksville.

[9] The plaintiff and defendant began to experience difficulties in their relationship during the fall of 2004. The “strained” relationship continued and in the spring of 2005 the plaintiff decided to purchase the property on Moilliet Road. As she was a mortgagor on the Allwood Road property, she could not qualify for a second mortgage in order to purchase the Moilliet Road property. The defendant agreed to release the plaintiff from any obligation arising under the Allwood Road mortgage. In order to achieve this end, the plaintiff conveyed her title in the Allwood Road property to the defendant.

[10] The Moilliet Road property was purchased by arranging a mortgage. As well, the defendant loaned the plaintiff an initial sum of $2,000 and a further sum of $5,484. There is a balance outstanding on these loans of approximately $3,100.

[11] In December 2006, the Allwood Road property had a value of $257,000 with a mortgage of approximately $104,000. At the same time, the Moilliet Road property was valued at $153,500 with a mortgage of approximately $95,500.

[12] The defendant says that the sale of the Russell Road property in Nottingham was a non‑arm’s length transaction and the true value of the property at the time of sale was £90,000. The plaintiff says that this property was sold for its market value and the valuation produced by the defendant relies on non comparables in the neighbourhood.

[13] These proceedings were commenced on July 13, 2006.

[14] The plaintiff’s claim for spousal maintenance is brought pursuant to sections 1 and 89 of the Family Relations Act, R.S.B.C. 1996, c. 128. Section 1(b) reads as follows:

“spouse” means a person who

…

(b) except under Parts 5 and 6, lived with another person in a marriage-like relationship for a period of at least 2 years if the application under this Act is made within one year after they ceased to live together and, for the purposes of this Act, the marriage-like relationship may be between persons of the same gender, …

[15] I have no difficulty in concluding that the committed marriage‑like relationship enjoyed by the parties was at an end by April 1, 2005. Indeed, it likely ended several months before that. In that regard, I agree with Joyce J.’s comments in D.L.M v. R.E.G., 2004 BCSC 364, when he said at para. 68:

I am of the opinion that the legislature intended the one year period to commence when the persons ceased living together in a marriage-like relationship, not when they stopped residing under the same roof. In my view, living together must mean something more than sharing the same residence. It is the marriage-like relationship that gives rise to the statutory right to support. In my view, it must be the cessation of that relationship that starts the clock running.

[16] The claim for spousal support is statute barred and accordingly, it must be dismissed.

[17] On the evidence, I am unable to conclude that the sale of the Russell Road property in Nottingham was for anything other than a fair market price.

[18] The real issue is what interest, if any, do the parties have in the two properties in Parksville and the proceeds of sale of the Russell Road property in Nottingham?

[19] The defendant says that when the plaintiff conveyed her interest in the Allwood Road property, she did so on the understanding that it was to become the property of the defendant, while the plaintiff would be the sole owner of the other two properties. In short, all of the claims the parties might have against each other arising from their ownership of property were settled by this oral agreement.

[20] The difficulty with this assertion is that the oral agreement has not been pleaded. Even if it were, I would have some difficulty in finding the existence of such an agreement on the evidence before the court.

[21] The plaintiff says she did not understand she was conveying her interest in the Allwood Road property to the defendant. She thought she was only being released of her obligations under the mortgage. She also says she was pressured by the defendant to sign the documents and did so under duress.

[22] I find the plaintiff was aware she was conveying title to the Allwood Road property to the defendant in the spring of 2005. She did so willingly and in order to qualify for a mortgage upon the purchase of the Moilliet Road property. When this was done however, the plaintiff did not abandon any interest she might have in the Allwood Road property arising out of trust principles.

[23] The defendant says that when she was living with the plaintiff in the rental property in Nottingham, she made financial contributions toward their accommodation. She thus assisted the plaintiff to acquire the initial £8,000 incentive payment that made up the down payment on the Russell Road property. She says she helped locate the property and contributed to repairs on the property from time to time. The plaintiff says the defendant did not contribute any funds towards the purchase or maintenance of this property.

[24] The parties contributed equally to the down payment, the expenses and mortgage payments on the Allwood Road property until their separation in April 2005. They shared equally in the chores of homemaking while living together in this home.

[25] The plaintiff asserts a claim in trust over the Allwood Road property. She asserts her claim to a one half interest on the basis of trust principles. The defendant denies this claim and asserts her own claim in trust to a one half interest in the Moilliet Road property and to a one half interest in the proceeds of sale of the Russell Road property. Both these claims are denied by the plaintiff.

[26] Counsel for the defendant says it is important to examine the entire relationship between the parties over a 15 year period and consider their collective property ownership at the end of the relationship. She says it would be wrong for the court to limit its examination to the Allwood Road property as the plaintiff would prefer. I agree with this submission, as claims in equity must always find a fair and equitable resolution. It would be wrong for the court to ignore a significant element in the relationship of the parties, namely other property held solely in the name of the plaintiff, if any contribution towards the acquisition or maintenance of the property was made by the defendant.

[27] The mere fact of living in a common law relationship does not, by itself, create an interest in property for one or other of the parties: Ford v. Werden (1996), 27 B.C.L.R. (3d) 169, 25 R.F.L. (4th) 372. Unjust enrichment of a party flows from a consideration of the principle enunciated by the Supreme Court of Canada in Peter v. Beblow, [1993] 1 S.C.R. 980 where at pp 987-988 McLachlin J. said:

The basic notions are simple enough. An action for unjust enrichment arises when three elements are satisfied: (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment. These proven, the action is established and the right to claim relief made out. At this point, a second doctrinal concern arises: the nature of the remedy. "Unjust enrichment" in equity permitted a number of remedies, depending on the circumstances. One was a payment for services rendered on the basis of quantum meruit or quantum valebat. Another equitable remedy, available traditionally where one person was possessed of legal title to property in which another had an interest, was the constructive trust. While the first remedy to be considered was a monetary award, the Canadian jurisprudence recognized that in some cases it might be insufficient. This may occur, to quote La Forest J. in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, at p. 678, "if there is reason to grant to the plaintiff the additional rights that flow from recognition of a right of property". Or to quote Dickson J., as he then was, in Pettkus v. Becker, [1980] 2 S.C.R. 834, at p. 852, where there is a "contribution [to the property] sufficiently substantial and direct as to entitle [the plaintiff] to a portion of the profits realized upon sale of [the property]." In other words, the remedy of constructive trust arises, where monetary damages are inadequate and where there is a link between the contribution that founds the action and the property in which the constructive trust is claimed.

[28] The foregoing passage was relied upon in Hubar v. Jobling, 2000 BCCA 661 at para. 17.

[29] I find that the defendant did make a contribution, however small, to the acquisition of the Russell Road property. She also made contributions from time to time toward the expense of maintaining the property. Thus there has been, with respect to that property, an enrichment, a corresponding deprivation and the absence of a juristic reason for the enrichment.

[30] Equally, the plaintiff made contributions to the acquisition and ongoing maintenance of the Allwood Road property. For these reasons, with respect to that property, there has been enrichment, a corresponding deprivation and the absence of a juristic reason for the enrichment.

[31] The defendant made a loan to the plaintiff to enable her to purchase the Moilliet Road property. Some payments have been made on this loan. It was in all respects a loan, and the defendant has no claim against this property. She is entitled to recover the money she loaned to the plaintiff.

[32] When I look at the entire relationship of the parties and the property in their hands at the time of separation, I find that based on the principle set out in Peter v. Beblow, supra, the plaintiff has a trust claim to a one half interest in the Allwood Road property. For the same reasons, the defendant has a trust claim to a one half interest in the proceeds of sale of the Russell Road property.

[33] For accounting purposes, the value of the Allwood Road property should be that which was determined by appraisal in December 2006. There should be no payment by the defendant to the plaintiff for use or occupation of the Allwood Road property since separation. Similarly, there should be no interest paid by the plaintiff on the defendant’s one half interest in the sale proceeds of Russell Road.

[34] The evidence is too conflicting and I am unable to reach any conclusions concerning the competing claims to ownership of certain chattels. Accordingly, the burden of proof has not been met and these claims by the plaintiff are dismissed.

[35] As there has been divided success, each party is to bear their own costs.

[36] In summary there will be an order:

1. dismissing the plaintiff’s claim for spousal support;

2. declaring that the plaintiff has a one half interest in the Allwood Road property, valued as at December 2006;

3. declaring that the defendant has a one half interest in the proceeds of sale of the Russell Road property;

4. dismissing the defendant’s claim for a trust interest in the Moilliet Road property;

5. dismissing the plaintiff’s claims for the return of certain specified chattels; and,

6. that each party bear their own costs.

“D. Vickers J.”

The Honourable Mr. Justice Vickers

Citation:	*Drake v. Fox,*
	2008 BCSC 574